Brightoil Petroleum eyes upstream gas assets

Hong Kong-listed Brightoil Petroleum Holdings is keen to buy more upstream gas assets to secure long-term growth and aims to sell more crude and chemicals to China, the world's largest energy consumer, Chairman Raymond Sit said.

Brightoil, the second-largest supplier of marine fuel in Singapore and China, wants to expand its upstream and trading businesses to other products after a slowdown in the shipping sector eroded its profit 76 percent in the last fiscal year. "China is a big supermarket in the world. They need energy, they need crude oil. For our company, we must capture this opportunity," Sit told Reuters.

This year, the 44-year-old Sit, who is believed to enjoy warm ties with officials in Beijing, travelled between 300 and 400 hours in search of "big gas blocks".

He declined to say where the prospects were, but added that an uncertain outlook for oil prices made it challenging to decide when to acquire these assets.

Brightoil owns two gas blocks in China, but Sit is not keen to jump on the shale gas bandwagon, even though Beijing has opened the sector to private companies controlled by Chinese investors.

"I don't like shale gas...It's difficult to make money," he said, adding that shale development was better left to international oil companies with the experience and resources.

China is on course this year for its weakest full year of expansion since 1999, although the latest data show the slowdown is bottoming out in the fourth quarter. Sit expects the global economy to improve in 2013 and wants to capitalise on a rise in China's demand for fuel and chemicals.

"China is going to open the door more for private companies," he said. "They will need more energy to support China's growth."

POSSIBLE CUT IN SALES VOLUME

Brightoil could cut its sales volume to minimise credit risks, as the shipping sector remains in the doldrums, Sit said, but he did not say by how much. Shippers have been suffering from an oversupply of vessels in a weak global economy.

"For bunkering I think it is very difficult because the shipping sector is losing money," he said.

He expects Brightoil to trade 10 million to 12 million tonnes of oil products in the next fiscal year, but declined to give this year's figure.

Brightoil posted a 76 percent plunge in profits in the fiscal year that ended in June, which has also seen the exit of chief executive Quek Chin Thean and the fuel oil